Zomato, the food-tech startup has seen a surge in its revenue by 80% to Rs 332 crore in the fiscal year. It has also succeeded in reducing its annual burn to Rs 77 crore from whopping Rs 441 crore last year. Zomato has also significantly scaled back on its operating losses.
The bigger share of Zomato’s revenue comes from its advertising business, which is also now facing competition from other companies for market leadership in the food delivery business. Zomato has claimed to have delivered more than 3 million orders in July of 2017 compared to its biggest rival Swiggy’s claims of over 4 million monthly deliveries.
The food delivery market in India is flowering as investors to space and Zomato is a frontrunner in the race. Zomato has raised $200 million from Ant Financial, the payments affiliate of Chinese e-commerce giant Alibaba. The deal values the online restaurant discovery and food delivery firm $1.1 billion with a money valuation of $945 million, Economic Times reported.
AntFinancial's parent company Alibaba is expanding its presence and business across the globe, especially in markets like Southeast Asia.
Zomato will utilize the capital to fight its two biggest competitors Swiggy and Foodpanda, with Foodpanda having a commitment from its new owner Ola to receive a $200-million investment over the next few years.
A lot of change has taken place in India's food technology sector with Swiggy, Zomato, Ola-Foodpanda, UberEats and Google Areo battling to claim the top spot.
However, the challenges with the food delivery market in India are huge with a lower frequency of orders and leaner average order values making the race to the front an extremely slow one. The food delivery firms will need to build a mixture of both content as leverage to attract customers and good delivery to make money, thus explaining the intense rivalry between the top aggregators present, Zomato and Swiggy.